Canada is stuck in a growth rut, but competition can get us out: Hunter Prize 2025

The Hub’s third annual Hunter Prize for Public Policy, generously supported by the Hunter Family Foundation, focused on solving Canada’s stagnant living standards and slow productivity growth. A diverse group of ten finalists has been chosen from nearly 250 entries, with the finalists and winners chosen by an esteemed panel of judges, including Theo Argitis, Hon. Lisa Raitt, Frances Donald, Jack Mintz, and Alicia Planincic. The Hub is pleased to run essays from each finalist this week that lay out their plans to help solve this persistent policy problem. The Hunter Prize is made possible thanks to the support of the Centre for Civic Engagement. Congratulations to Matthew Chiasson for this $25,000 grand prize-winning proposal in the third annual Hunter Prize. The runner-up was Charles Lammam for a proposal for big, bold tax reform. Anyone who’s ever laced up skates on an outdoor rink knows the difference between a clean sheet of ice and one covered in ruts and snow. One environment brings out our best; the other, our clumsiest. Canada’s economy is struggling, but not for lack of talent or potential. Instead, our regulatory environment—like a neglected community rink—has slowed the pace of play and created deep ruts that favour established players who know where the cracks are. After decades of accumulated friction, we need more than a few quick laps with a shovel; we need a good overnight flooding to restore a level playing field. If all levels of government can come together to clean the ice, competition and business dynamism will thrive, delivering sustained and inclusive growth that no other policy reform can deliver at such little cost. Barriers to competition are holding us back Between 2006 and 2021, federal regulatory burden increased by 37 percent, a rise linked to slower growth in GDP, jobs, and investment. That’s just the federal side; data shows roughly 400,000 regulatory restrictions span our provinces and territories. The average Canadian business now reportedly spends 32 days a year complying with red tape, equivalent to 137,000 full-time jobs and $17.9 billion in costs. Small and growing firms are engines of job creation and productivity, yet the vast majority of small business owners warn that excessive regulation is hindering their productivity and growth. Most say that they would not recommend entrepreneurship to the next generation. That’s worrying. To be clear, we need regulation to address market failures and safeguard legitimate public interests. The problem is that we are not regulating in a competition-friendly way. In 1998, Canada had the 10th most competitive regulatory environment in the OECD, but over the years, our ranking has slipped to 26th. A closer look reveals that anti-competitive regulation spans key sectors of our economy and that we lag badly in cross-cutting areas like administrative burden, licensing, foreign investment openness, public procurement and governance of state-owned enterprises. Unsurprisingly, this is weighing on competition. Business entry and exit rates have roughly halved over the past 40 years, and rates of entrepreneurship have fallen by the same amount over the past 20. Roughly 30 percent of the decline in investment per worker since 2006 can be attributed to fewer new firms entering markets. Against this backdrop, the potential gains from pro-competitive reform are enormous. Studies estimate that liberalizing internal trade barriers could boost GDP by 4-8 percent, easing foreign investment restrictions could provide a 2-5 percent lift, and reducing barriers in professional services could grow the economy by an eye-watering 4.5 percent. These are extraordinary figures, but they are less surprising when considering that Canadian firms are better managed, more innovative, and more likely to adopt new technologies and processes when exposed to greater competition. We need a national competition agenda  To boost competitive intensity and unlock this growth, we need a national competition agenda. Taking inspiration from Australia’s hugely successful National Competition Policy, this would be a 10-year agreement between federal, provincial, and territorial governments to systematically identify and reduce regulatory barriers across the economy. The agenda would rest on three mutually-reinforcing pillars. Pillar 1: National stock review of regulations with a competition lens Governments at all levels would commit to a structured review of laws and regulations, guided by agreed criteria and timing. Provinces, for example, could commit to easing occupational licensing restrictions, barriers to labour mobility, procurement frictions, and outstanding internal trade barriers. The federal government could look for ways to boost competition in network sectors like transportation, telecom, and banking. When Australia went through this exercise, it permanently boosted its GDP by 2.5 percent. Pillar 2: Opt-in federal transfer scheme to incentivize reform  Regulatory change is often politically difficult for provinces, which bear most of the costs, while the federal government captures a disproportionate share of the economic benefits through rising tax revenues. To overcome inertia, a targeted, time-limited federal transfer program would provide payments to provinces conditional on the delivery of pro-competitive reforms. These transfers would be financed out of anticipated increases in federal revenue arising from higher economic growth, ensuring fiscal responsibility. Canadian economists have recommended this as a way of accelerating internal trade liberalization, and there is no reason why it wouldn’t work for other barriers. When the Aussies did it, it worked and was heralded as an unparalleled example of cooperative federalism. Pillar 3: Dedicated accountability unit to coordinate and track outcomes For the agenda to remain focused and sustained over the 10-year horizon, a team housed within an existing institution like the Council of the Federation would provide support, coordinate engagement, and track progress. The Wilson Panel recommended institutionalizing regulatory reform in 2008, but we never took it up—a missed opportunity. A clear path to prosperity In 2018, Canada’s Economic Strategy Tables concluded that “Regulations are priority number one, two, three and four. If we don’t fix our regulatory issues, none of the rest matters.” This proposal tackles that problem head-on, relying on coordination, transparency, and targeted incentives. We have momentum on our side: provinces are already pursuing regulatory modernization, and the federal government has pledged to be “hawkish on competition.” By bundling reforms, we can diffuse opposition and build on this progress. The benefits for long-term growth are clear. And by achieving them through competition, we will also put downward pressure on prices, offering Canadians relief on the cost of living. Canada needs a big change in its economic trajectory. This reform agenda is a smart, responsible, and actionable way to get there. Let’s clean the ice. Read the policy paper: